Futures referencing Canada’s main equity benchmark opened lower on Monday as market participants braced for a heavy corporate reporting slate, central bank decisions and continuing geopolitical friction tied to the U.S.-Iran confrontation.
By 07:58 ET (11:58 GMT), the S&P/TSX 60 index standard futures contract had eased 2 points, or 0.1%.
The S&P/TSX composite index ended the previous session down 0.03% at 33,904.11 on Friday, closing a week that saw the benchmark fall 1.3% and break a four-week run of gains.
Across the border, U.S. equity futures offered a mixed picture as traders positioned for an unusually busy week that will feature not only policy decisions from central banks but also a flood of quarterly results from major companies, including technology names investing heavily in artificial intelligence initiatives.
At 07:52 ET, Dow futures had slipped 53 points, or about 0.1%, S&P 500 futures were essentially flat, and Nasdaq 100 futures were up 45 points, or 0.2%.
On Friday the main U.S. averages closed in mixed fashion: the S&P 500 and the Nasdaq Composite advanced while the Dow Jones Industrial Average lagged.
Geopolitical developments remained a primary market influence. Sentiment toward equities received a lift late last week from the prospect of renewed talks between the U.S. and Iran aimed at ending their roughly two-month war and reopening the Strait of Hormuz, a strategic maritime chokepoint that channels a substantial share of global oil shipments.
Over the weekend, however, U.S. President Donald Trump canceled plans to send American negotiators to Pakistan for fresh discussions with Iran, signaling that the practical closure of the strait could persist. Speaking on Sunday, Trump said Tehran could "call me" if it wanted to pursue talks and reiterated that Washington holds "all the cards." He added, "If they want to talk, they can come to us, or they can call us."
Media reports on Monday said Iran has proposed ending its effective closure of the Strait of Hormuz without addressing its nuclear program, and that Tehran was seeking an end to the U.S. naval blockade of Iranian ports. The proposal was reportedly relayed to Washington via Pakistan. It was not clear whether the offer would be accepted by President Trump. Two regional officials were cited for the account, and another outlet was said to have been first to report aspects of the proposal.
Oil markets reacted to the uncertain diplomatic backdrop. By 07:54 ET, Brent crude futures, the global benchmark, had climbed 1.0% to $106.36 a barrel, while U.S. West Texas Intermediate futures were up 0.7% at $95.10 a barrel.
The persistence of supply disruption risks in the Middle East has supported prices, and that dynamic is feeding through into investor assessments across asset classes heading into a busy policy week.
Against that backdrop, gold traded muted. Spot gold slipped 0.1% to $4,703.20 an ounce, and gold futures were down 0.5% at $4,718.41 per ounce by 08:01 ET as markets awaited the Federal Reserve.
All eyes are on the Fed’s two-day meeting that concludes on Wednesday. The Federal Reserve is widely expected to keep interest rates unchanged, but commentary from the meeting on how policymakers view the economic outlook in the wake of energy-market shocks will be parsed closely.
The coming Fed meeting will be the last under Chair Jerome Powell, whose term expires on May 15. Kevin Warsh, President Trump’s nominee to succeed Powell, testified before Congress last week that he had made no commitments to cut interest rates.
Market participants are particularly attentive to the interplay between interest-rate expectations and asset prices given the changes in energy costs. Gold, as a non-yielding asset, typically performs better in environments where interest-rate expectations ease, a dynamic investors will be watching in real time through Fed commentary and subsequent market moves.
Corporate news is also shaping investor positioning. Verizon shares rose after the telecom operator raised its annual profit guidance and reported unexpected wireless subscriber additions in the first quarter, which management attributed in part to bundled plans and refreshed promotional activity.
The week ahead will be dense with earnings: roughly 35% of the companies in the benchmark S&P 500 are scheduled to report results over the coming days. Attention will center on a clutch of mega-cap technology firms that have been directing substantial capital toward building artificial intelligence capabilities.
"Q1 reporting season has been solid thus far, with the S&P set for a sixth straight quarter of double-digit earnings growth, while enthusiasm towards the tech sector has also made a notable resurgence," said Michael Brown, Senior Research Strategist at Pepperstone, in a note. That renewed enthusiasm in technology will be in sharp focus when results arrive from companies that have been among the largest investors in AI infrastructure and software.
Those capital commitments to AI form a key component of investor narratives that have helped equity markets extend gains in recent weeks despite the headwinds presented by the Iran conflict and related energy-market disruptions.
Investors thus enter the week balancing near-term geopolitical uncertainty, incoming corporate earnings that will test the durability of profit expansion, and central bank guidance that will influence the path of interest rates and, by extension, valuations across interest-sensitive sectors.
Given the convergence of these drivers, market participants are expected to monitor developments across oil markets, big-cap technology results and the Fed’s commentary closely to gauge the next directional move for risk assets.